Bitter Friday for Nestlé: Russia seizes assets as Moscow targets Western firms over Ukraine support

In a sharp escalation of retaliatory economic measures against foreign businesses, Russian authorities have seized the operations and assets of Swiss food giant Nestlé alongside three French corporations, transferring their local management to a Russian state-linked entity.

A decree signed by President Vladimir Putin late Thursday placed Nestlé’s Russian subsidiaries — including Nestlé Russia and Nestlé Kuban — under the temporary administration of LEV Management. Headed by a former Interior Ministry major general, LEV Management now holds operational control over the assets. Kremlin spokesperson Dmitry Peskov defended the move on Friday, directly citing western military and economic support for Kyiv as the driver behind targeting firms from "unfriendly countries".

The decision strikes at the heart of Nestlé’s long-standing Russian presence, which includes six manufacturing facilities producing coffee, pet care, and infant formula, and employs approximately 7,000 workers, as per a AFP report.

"The company is assessing the situation and its options," Nestlé said in a statement, emphasising that it remains "committed to taking all necessary steps to protect its rights and ensure continuity of business operations in the interests of all stakeholders, particularly its employees".

Financial markets reacted immediately to the Kremlin’s directive. Nestlé shares dropped over 1.7% to 77.01 CHF during early trading on the Zurich stock exchange. Analyst estimates suggest that a complete write-off of Nestlé’s assets and non-repatriated capital in Russia could result in a hit of roughly 1 billion Swiss francs ($1.2 billion).

The temporary administration directive also extended to major French corporate holdings, including retail chain Auchan, DIY supplier Lemana Pro (formerly Leroy Merlin), and logistics group FM Logistic. While the parent companies technically retain ownership, the decree blocks them from making strategic or operational decisions regarding their Russian units.

The move mirrors previous expropriations, such as Moscow’s 2023 takeovers of Danone’s Russian operations and Danish brewer Carlsberg’s Baltika unit. Analysts note that such temporary administrations have historically served as a precursor to forced asset sales at steep discounts to Russian buyers.

Nestlé had previously curtailed advertising, non-essential imports, and capital investments in Russia following the 2022 invasion of Ukraine, but continued supplying essential food and infant nutrition products. The Russian market currently accounts for around 1% of Nestlé's global group sales, down from 2% prior to the conflict.

Nestle India faces FSSAI crackdown 

In a fresh regulatory development for the fast-moving consumer goods sector, India's Food Safety and Standards Authority of India (FSSAI) initiated action against FMCG major Nestle India over alleged non-compliance in its infant product lineup.

The food safety body zeroed in on promotional claims made on product labels and advertising materials, specifically targeting assertions around "5 HMOs" (Human Milk Oligosaccharides) and "easy-to-digest whey" proteins in its baby food offerings.

According to regulatory findings, such marketing claims failed to align with prescribed labeling norms governing infant nutrition. The probe also flagged broader formulation parameters across select batches, including non-permitted levels of biotin that breached statutory standard limits, along with discrepancies in nutritional breakdown declarations.